Changes in hotel industry budgetary practice

Abstract

Purpose -The purpose of this paper is to provide an insight into budgetary practice in UK-based hotel organizations and an update on previous survey work in this area. The research aims to cover a broad range of budgeting issues, including: the process used in setting budgets, monitoring and review of the budgetary processes, and the human aspects of the budgeting process. Design/methodology/approach -This research used a census-based questionnaire of hotel organizations' finance directors. The questionnaire consisted of mainly closed questions, with opportunities for further explanation to be given. Statistical analysis tools included Chi-square tests, Spearman's Rank Coefficient, and ANOVA. Findings -The paper finds that the key reason organizations produce budgets are to aid control, evaluate performance and aid planning. Neither the top-down, bottom-up or combination approaches to budgeting dominated in the UK. The results showed a higher rate of the top-down approach in the UK, compared to previous surveys in other countries. Budgets were generally viewed as the main performance indicator in hotel organizations. There is little use of flexible budgeting, budget committees or budget manuals in the hotel industry. The "human aspects" of budgeting identified some interesting contradictions such as the belief that participation is key in budgeting working, yet there is a lack of participation in practice, most significantly amongst hotel department managers. Originality/value -Limited information as to budgetary practice in hotels has previously been published, particularly related to the UK. This survey and further findings from the broader research project it is part of identify hotel industry budgetary practice. This aids identifying change over time and provides an invaluable insight into how budgets are used in the industry.

Estudo sobre a implantação do orçamento baseado em desempenho na Autoridade Portuária de Valência

“…A literatura nacional e a internacional apontam distintas características para o processo orça-mentário (Schmidgall e Ninemeier, 1986Umapathy, 1987;Schmidgall, Borchgrevink e Zahl-Begnum, 1996;Schmidgall e DeFranco, 1998;Jones, 1998Jones, , 2008aJones, , 2008bSubramaniam, Mcmanus e Mia, 2002;Winata e Mia, 2005;Prendergast, West e Shi, 2006;Yuen, 2006;Rankin, Schwartz e Young, 2008;Pavlatos e Paggios, 2009;Oak e Schmidgall, 2009;Derfuss, 2009;Steed e Gu, 2009;King, Clarkson e Wallace, 2010;Uyar e Bilgin, 2011;Castro et al, 2012). Essas principais características do processo orçamentário apontadas na literatura estão ilustradas no quadro 1.…”

Budgeting practices: a study on Brazilian hotel companies

“…In the UK, Jones (2008b) concluded that none of the approaches (bottom-up, top-down and combination/participatory) was predominant. Uyar & Bilgin (2011) and Steed & Gu (2009) observed that in Turkey and the United States, respectively, most hotels use the combination/participatory approach.…”

“…The survey applied was developed from the fundamental characteristics identified in the literature review Ninemeier, 1987 and1989;Schmidgall et al, 1996;Schmidgall & DeFranco, 1998;Jones, 1998Jones, , 2008aJones, and 2008bSubramaniam et al, 2002;Winata & Mia, 2005;Yuen, 2006 and2007;Pavlatos & Paggios, 2009;Steed & Gu, 2009;Uyar & Bilgin, 2011).…”

“…Furthermore, 53% of respondents reported not making changes resulting from the volume, while 38% make adjustments due to variations in occupancy levels. Also according Uyar & Bilgin (2011) in Turkey and Jones (1998 and2008b) in the UK, the revisions are in most cases quarterly.…”

“…Compared to studies by Jones (1998 and2008b) conducted in hotels in the UK, where the flexible budget is little used, the zero-based budget is applied to half of the companies surveyed, decreasing slightly in the second study. Likewise, Pavlatos & Paggios (2009) conducted studies in Greece and found that the use of zero-based budget is significant, while the application of the flexible budget and activities is quite low.…”